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Effective March 15: CMS Rule Regarding MEDICARE Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and necessary’

On January 14, 2021, the Centers for Medicare & Medicaid Services (CMS) released the Final Rule, “Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary.” As part of Medicare’s Patients over Paperwork initiative, this final rule regulates how the largest U.S. federal payer will reimburse for innovative technologies beginning March 15, 2021.

Summary
The MCIT Rule creates a new, accelerated Medicare coverage pathway for innovative products that the FDA deems as “breakthrough” status. Ultimately, this will provide Medicare beneficiaries more immediate access to innovative and potentially life-saving devices.

Under the MCIT Rule, Medicare may provide national coverage simultaneously with FDA approval, up to a period of four years. After the coverage period is over, CMS reevaluates each device based on real-world clinical and Healthcare Economics and Outcomes Research (HEOR) evidence among Medicare beneficiaries to determine more permanent coverage.

This four-year timeline may incentivize breakthrough device manufacturers to develop additional evidence regarding applicability of products to Medicare populations so Medicare coverage may continue beyond the initial four years.

Definition: “Reasonable and Necessary”
The definition of “reasonable and necessary” will be codified in regulation. This definition applies more broadly than MCIT, and will be used for National Coverage Determinations (NCDs) and other coverage decisions.

The “Medicare definition of a reasonable and necessary” item or service has three main elements:

  • Safe and effective
  • Not experimental or investigational
  • Appropriate for Medicare patients

For national and local coverage determinations that have insufficient evidence to meet the appropriateness criteria, CMS will consider coverage to the extent the items or services are covered by a majority of commercial insurers.

Impact

  • This rule is retrospective and allows device manufacturers that previously received FDA breakthrough status after January 2019 to apply for MCIT.
  • Device manufacturers interested in achieving FDA breakthrough status may want to evaluate their new option to apply for MCIT; manufacturers must still obtain the appropriate code(s) for the device.
  • While MCIT only applies to FDA breakthrough technologies, this reinforces the linkage between regulatory and reimbursement pathways and the importance of considering reimbursement prior to establishing regulatory strategy and engaging with the FDA.

Resources:

How Can NAMSA Help?

Global medical device innovators often face similar challenges when bringing novel technologies to the marketplace. However, healthcare payment and reimbursement systems throughout the world are complex and vary widely from one country to another, making it critical to understand potential reimbursement risks.

As a result of these intricacies, global medical device organizations may lack the proper context, experience, and contacts when building effective reimbursement and commercialization strategies—that’s where NAMSA’s international team of reimbursement and market access experts can put their knowledge to work for you.

NAMSA offers a full continuum of reimbursement and market access solutions for new and existing medical technologies. Our teams are expert in all aspects of reimbursement strategy, including: healthcare economics, payer relations, coverage advocacy, medical policy research, HCPCS and CPT code analysis/applications and stakeholder value mapping.

Learn more by visiting our Reimbursement Solutions webpage, or by accessing one of our complimentary resources below:

  • White Paper: Achieving EU and U.S. Commercialization Success—The Critical Linkage Between Reimbursement and Regulatory Strategies
  • Webinar: Reimburse Opportunities and Challenges in 2020
  • Webinar: Achieving Medical Device Development Success through Early Implementation of Regulatory, Reimbursement and Clinical Research Strategies
  • White Paper: Medical Device Reimbursement Strategy—How to Plan for Successful Market Commercialization
  • Webinar: Understanding Medical Device Reimbursement Fundamentals to Achieve Commercial Success

Ready to get put your regulatory, reimbursement, and market access program on the fast-track? Get in touch today: https://namsa.com/locations-contact/.

Christopher Salmen

Christopher Salmen

Christopher Salmen specializes in health policy, reimbursement strategy and market access for medical device, diagnostic and digital health companies. Mr. Salmen offers a strong understanding of various U.S. healthcare payment models and stakeholder incentive structures. Over the last 15 years, Christopher has acted as both external consultant and employee for medtech manufacturers and healthcare providers. Early in his career, he focused on sales operations and corporate development. At DexCom, he was asked to build out the reimbursement operations function and quickly learned how to help patients access their health insurance to subsidize Continuous Glucose Monitor purchases. Subsequently, he went to work for an external consultancy that focused on DMEPOS for the Diabetes Industry where he increased market share of covered lives for 3 new clients. In 2013, Mr. Salmen was recruited to join ResMed, where he successfully obtained coding for over 250 products, changed Medicare payment policies and served on multiple industry councils. In 2019, he joined Hologic where he obtained de novo AMA CPT Codes and CMS reimbursement rates for novel diagnostics (i.e. M. Genetalium, BV MAAA, & COVID-19). And finally, in October 2020, Mr. Salmen joined NAMSA to lead the Reimbursement Consulting Department into the next stage of growth for the organization. Mr. Salmen holds a Master of Business and Science Degree from Keck Graduate Institute and a Bachelor of Science Degree in Pre-Med/Biochemistry from Colorado College.